02062cam a22002537 4500001000600000003000500006005001700011008004100028100002300069245008800092260006600180490004100246500001800287520088500305530006101190538007201251538003601323690009501359690016301454710004201617830007601659856003701735856003601772w8072NBER20150303180931.0150303s2001 mau||||fs|||| 000 0 eng d1 aWoodford, Michael.10aFiscal Requirements for Price Stabilityh[electronic resource] /cMichael Woodford. aCambridge, Mass.bNational Bureau of Economic Researchc2001.1 aNBER working paper seriesvno. w8072 aJanuary 2001.3 aThis paper argues that maintaining price stability requires not only commitment to an appropriate monetary policy rule, but an appropriate fiscal policy rule as well. 'Ricardian equivalence' does not imply that fiscal policy is irrelevant, except in the case of a certain class of policies (called 'Ricardian' policies). The role of fiscal developments in inflation determination under a non-Ricardian regime is illustrated through an analysis of the U.S. bond-price support regime of the 1940s. Several recent theoretical challenges to the logical possibility of a non-Ricardian regime are addressed, and a number of consequences are then drawn for the choice of policies to ensure price stability. An example of a monetary-fiscal regime with attractive properties would combine a 'Taylor rule' for monetary policy with nominal-deficit targeting as a fiscal policy commitment. aHardcopy version available to institutional subscribers. aSystem requirements: Adobe [Acrobat] Reader required for PDF files. aMode of access: World Wide Web. 7aE31 - Price Level • Inflation • Deflation2Journal of Economic Literature class. 7aE42 - Monetary Systems • Standards • Regimes • Government and the Monetary System • Payment Systems2Journal of Economic Literature class.2 aNational Bureau of Economic Research. 0aWorking Paper Series (National Bureau of Economic Research)vno. w8072.4 uhttp://www.nber.org/papers/w807241uhttp://dx.doi.org/10.3386/w8072